The awkward juxtaposition occurred because American Airlines chose that day to announce that HP had signed a letter of intent to develop a new passenger service system, Jetstream, for American, replacing the Sabre host system.

For months, Sabre knew it had been out of the running to get the new contract, and the competition had been narrowed down to HP and Amadeus.

The timing of the HP-AA announcement has people scratching their heads.

Was there a pointed message there for Amadeus? Seemingly so.

While the impetus for American's decision undoubtedly was complex and based on numerous factors, one reason making the rounds is that the Amadeus common IT platform, adopted by Star Alliance carriers and used by some of American's partners in Oneworld, including BA and Iberia, takes a sort of community-governance approach.

In other words, airlines using the platform, which is based on the Amadeus Altea Suite, have a say in establishing development priorities, even voting on major platform decisions.

And, American, according to a source, bristled at the idea of being somewhat of a commoner in this regard within the Amadeus common IT platform set-up.

One little matter starkly absent in Amadeus' statement on its ongoing commitment to the North American market was mention of its 2005 deal to replace Travelport's Apollo system as the host for United Airlines.

Forrester Research analyst Henry Harteveldt said United decided some time ago to go slow on the transition to Amadeus out of cost concerns and on-again, off-again banter about merging with Continental.

Harteveldt said United's move to Amadeus may never take place and the absence of an established carrier client in North America hurt Amadeus' wooing of American.

Harteveldt wrote an excellent piece in the Forrester Blog, detailing the context of American's move to HP.

As we know from United's stilted transition to Amadeus, replacing an airline reservations system is a gargantuan, problematic task, and so far HP merely has signed a letter of intent to get the ball rolling with American.

Another example of host-system interruptus was Air Canada's recent decision to put the brakes on its host-system development contract with ITA Software.

Meanwhile, Sabre, born out of American Airlines and still counting the carrier as among its largest customers, can take solace that any transition to HP will be protracted.

But, as any kid will tell you, it still really hurts to be shunned by a parent.

Monday, August 24, 2009

Make no mistake about it: Expedia's $123.4 million settlement and Hotwire's $5.5 million tab are financial blows to the companies, and you hear few online travel company whispers these days that the momentum in the consumer and municipal hotel-tax battles is in the OTCs' favor.

But Expedia, Hotwire and the consumer plaintiffs added a marketing element to the proposed settlements that may substantially ease the fiscal burden.

Expedia consumers eligible for the settlement can opt for cash equal to 30 percent of what they paid in service fees or take their compensation in the form of an Expedia travel credit for 65 percent of what they initially paid.

Similarly, Hotwire consumers can get 25 percent in cash or 65 percent as a credit toward travel through Hotwire.

This formula seemingly reduces the financial blow to the companies, attracts bookers to their websites and gives them the opportunity to upsell the aggrieved consumers with higher-end hotel rooms and packages.

When you also consider that Expedia and Hotwire notify eligible consumers about the settlement using e-mail addresses that the travelers might have retired years ago, the financial scope of the settlements narrow even more.

Another interesting element of the Hotwire settlement is that Hotwire is required to change the way it explains the total cost of a hotel room.

"Website Changes: Hotwire will, for two years following the Effective Date, revise its website to include a statement that the total cost shown will include all taxes, charges, surcharges, shipping/handling and Hotwire Request resubmission or other fees. The amounts will be posted on their website but will not be separately itemized," according to the settlement.

And, another provision: "In addition, the Frequently Asked Questions section of their [Hotwire's] website will contain revisions that were negotiated as part of the Settlement. Hotwire may, at its discretion and good faith, modify the negotiated text to make it consistent with any changes to its business practices, to increase its clarity, or to comply with a legal obligation or court order."

It's all about transparency.

Expedia and Hotwire -- although they continue to deny it -- got slapped with these settlements because of consumer allegations that the websites weren't forthcoming about the real nature of their fees.

Even the language changes at Hotwire, as outlined above, don't go far enough in detailing to consumers what they actually are paying for when booking a hotel room online.

So it looks like Expedia, Hotwire and other online travel companies will continue to be able to protect their hotel merchant models and dodge the transparency bullet for now.

Thursday, August 20, 2009

In the dog days of August, Air Canada has given Apple some AC as the airline became what it claims is the first North American airline to release an app for the iPhone and iPod Touch.

The airline says the free Air Canada App, developed by IBM Canada and available at the itunes store, enables travelers "to retrieve electronic boarding passes, track flight information in real-time, receive notification of itinerary changes and obtain other details about Air Canada flights."

I can't tell you how it works because my iPhone dabbling awaits the end of my Blackberry contract next May.

However, I can tell you that Air Canada, the financially trouble Canadian carrier, has been ahead of the curve in its technology offerings.

Early in the game, Air Canada introduced branded fares, and it has a bunch of distributors using its API, called AC2U, which enables intermediaries to access those Tango, Tango Plus and other fares in the manner that the airline desires.

Even a global distribution system, Apollo Canada, is tied into AC2U.

The iPhone and Travel is one of the most downloaded reports at PhoCusWright, a testament to the hotter-than-hot nature of mobile applications for travel.

So, with its new iPhone and iPod app, Air Canada is continuing to take app-propriate actions.

Wednesday, August 19, 2009

The travel industry is grappling with a fix for sometimes-suspect hotel reviews, and the latest entity to offer a solution is Shermans Travel, a deal-publisher and media company.

Shermans Travel believes it has found a credible formula in its new Sherman Meter Rating.

This new beta test of the Sherman Meter Rating closely follows the move by professional-review website Oyster Hotel Reviews to require consumers to use Facebook Connect if they want to pen hotel reviews. Oyster feels having consumers shed their anonymity will lead to more reliable reviews.

And, the context for the Oyster.com and Shermans Travel review experiments is months of controversy about the usefulness of user-generated content in general, and hotel reviews on TripAdvisor.com, in particular.

In its announcement, Shermans Travel gets a little carried away in its hype for the Sherman Meter, billing it as a "proprietary meta-search tool."

It may be proprietary, but it is not a metasearch tool in the sense that you cannot compare reviews from various sources in grid-like fashion.

But, still the Sherman Meter indeed offers a hedge against review manipulation by hotels, and it is a useful contribution to the debate.

The Sherman Meter rates hotels by aggregating consumers' reviews from sites like TripAdvisor, Yelp and Yahoo Travel; tosses in "professional" critiques from Concierge, Frommer's and Fodor's; sprinkles it all with its own expert assessments; and comes up with a percentage of positive reviews with a corresponding color code.

If the Sherman Meter is green, then the reviews generally are positive. Yellow means the reviews are mixed, and red points to negative reviews.

Darren Frei, editorial director for ShermansTravel.com, tells me that the aggregated user reviews, the professional reviews and Shermans' own expert reviews get "roughly equal weight in our proprietary algorithm."

Hence Sherman has figured out a way -- however imperfect -- to hedge against hotel industry/pr/marketing gamesmanship.

That's because Shermans utilizes the "wisdom of the masses" in sometimes hundreds or even more than 1,000 consumer reviews from a variety of websites for a particular property; the opinions of the professional or guidebook crowd; and also Shermans' own staff-formulated reviews, with the latter being "a qualitative evaluation independent" of the Sherman Expert Review displayed on the website, Frei says.

Given that Shermans Travel -- which publishes deals, provides a travel search engine and has a print magazine -- likely makes most of its money in the media/advertising business, is there an advertising bias in the Sherman Expert reviews?

Frei says: "All of Sherman's Expert Reviews are selected and managed by our in-house editorial staff, which evaluates and edits hotel reviews without input from the advertising department."

So, what are the results?

I just spent the last eight hours or so checking out the Shermans Meter for a variety of properties and found similar patterns.

Let's consider, for example, the Waldorf-Astoria in New York City.

The Sherman Meter assesses 1,310 user reviews from a variety of websites, "professional reviews" [more on this later] from Fodor's and Frommer's [Concierge doesn't rate the Waldorf], and the opinions of Shermans' own experts, and gives the Waldorf a 76 percent, or green, rating.

Incidentally, the Sherman Expert Review for the Waldorf is descriptive, but neutral and doesn't really tell me whether the wallpaper is pealing or whether I am guaranteed to get a Brangelina sighting.

Independent of Shermans Travel, TripAdvisor, using 1,051 traveler reviews of the Waldorf, gives the property four stars and a 72 percent TripAdvisor Traveler Rating, in the same ballpark as the Shermans Meter.

Then we arrive at the so-called professional reviews.

It turns out that Concierge.com doesn't rate the Waldorf.

Fodor's rating actually isn't a professional rating. Instead Fodor's provides a 3.4 "member rating," meaning the Fodor's rating turns out to be another consumer-review compilation.

However, I found the Fodor's Review of the Waldorf valuable because, unlike Sherman's Expert Review, at least the Fodor's Review offered pros and cons about the property, including Fodor's opinion that the "rooms [are] not contemporary; very public lobby includes loads of tourists hoping for Brangelina sighting."

And, I have problems with the Frommer's review methodology and the fact that the Shermans Meter gives it substantial weight.

Thus, there are no reviews of hotels that are not recommended. Where is the credibility in that?

Frommer's rates the Waldorf three stars [its highest rating], or exceptional, and is lone among the above review sites to do so.

And, the actual Frommer's Review of the property, like Sherman's Expert Review, is descriptive, but neutral and not very insightful.

Meanwhile, Oyster.com, which relies on journalist reviews and just added consumer reviews using Facebook Connect, gives the Waldorf four stars out of five, and doesn't yet offer a consumer comment about the hotel.

Like Fodor's -- and unlike Shermans and Frommer's -- Oyster.com at least serves up some pros and cons about the Waldorf, including its opinion that the property has a "top-notch gym and spa (among New York's best)."

So, where does this leave us?

Shermans, with its mix of consumer, professional and its own expert reviews on the Waldorf, has the same overall view of the Waldorf as TripAdvisor does, despite all the allegations about TripAdvisor's suspect consumer reviews.

TripAdvisor doesn't come out looking so bad, although I know I am discussing merely one, large, well-known property. (And, it is easier to manipulate rankings for smaller hotels.)

The expert reviews offered by Fodor's and Oyster are cool because at a minimum they are unafraid to ruffle some feathers.

And, Frommer's review stands out as the questionable one in the crowd because Frommer's stands alone in its assessment that the Waldorf is exceptional.

Instead of having to wade through 1,469 reviews and murky star ratings, raveable gives the Waldorf an overall rating, plus ranks the property on its service, the rooms and value. It also outlines where the Waldorf stands not only when measured against all other New York City hotels, but also evaluates its stature amongst the other four-star hotels (49th of 62).

The question then becomes: Would travelers rather rely on the opinions of admittedly seasoned experts on Frommer's, unvetted consumer reviews displayed on TripAdvisor, concise analysis of consumer reviews on raveable, journalists' critiques on Oyster.com, or Shermans sometimes-flawed mix of user reviews, professional reviews and its own experts?

Tuesday, August 18, 2009

It’s about time someone data-mined and used all of that historical data on flight delays to tip off travelers to expected on-time arrival woes. Without delay, Flightcaster, a start-up which reminds me of another company engaged in data-casting, began informing passengers about airline-delay patterns.

TechCrunch: YC-Funded Flightcaster Tells You When Your Flight Is Delayed Hours Before The Airline Will: Flightcaster taps into a variety of data sources to try to uncover the truth. The service keeps track of FAA alerts, weather, network congestion, historical trends, and other factors, which are all run through an algorithm to provide an estimate of how likely it is that a given flight will be delayed. Read more

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Cendant Travel Distribution Services, an Orbitz Worldwide ancestor, acquired HotelClub and RatesToGo in 2004; Priceline.com purchased Booking.com the same year; Expedia Inc. added Venere to the fold in 2008; and now Travelocity picks up Travelguru as the blueprint for bolstering its hotel inventory in India. Buy and then build is an answer for adding inventory from the fragmented hotel market in parts of Europe and Asia.

Hudson Crossing Travel Industry Insight: Travelocity Gets a Guru: How Will the Gnome Feel?: This morning, Travelocity announced the purchase of Indian portal Travelguru. Interestingly, the press release calls Travelguru "India's leading hotel distribution network" which it may very well be. Adding 4000 hotels, most of which are independent, non chain affiliated properties is a major coup for Travelocity and for Sabre, particularly if they are able to expose this new inventory in the Sabre GDS. Adding hotel inventory in India is, in a word, hard. The extremely limited presence of the large chain hotels makes adding inventory a slow, manual process that requires lots of feet on the street. It appears Travelguru has solved this issue. Read more

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Norm Rose has studied the fast-moving mobile market and believes that travel companies need to think both short-term and long-term when developing mobile strategies for Smartphones. Rose posits that browser-based applications may dominate in the long run, but downloadable apps will probably be the right move over the next 3-5 years.

Travel Technology: Smartphone Market Share Influences Download versus Mobile Web Debate: In a recent article from Media Post a software application developer from Istanbul, Turkey attending a conference in San Jose, California, voiced his opinion that the US does not understand the importance of the Mobile Web. This article reminded me of the panel discussion I moderated at the PhoCusWright @ITB conference in Berlin earlier this year where the subject of downloadable applications was debated against the advantage of the Mobile Web with a panel of European mobile travel experts. Read more

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Airline passengers in Europe have it all over their U.S. counterparts because the European Union has a passenger rights law in place. That type of legislation seems to have been discarded like a piece of lost luggage in the U.S., where airline passengers have very limited protections.

Voice of America News: Avoid Your Own Air Travel Horror Story: Imagine that you’ve made it through airport security and have found your seat aboard a commercial airliner. You sit back and think about the great vacation or business deal at the other end of your flight. Lost luggage and delayed takeoff are probably far from your mind. But unfortunately they are not far from the reality of modern air flight. Read more

Eight airlines, including American Airlines and Southwest, stepped up and agreed to use renewable synthetic diesel fuel to operate their ground-service vehicles at LAX in a bid to reduce their carbon footprints.

Dallas Business Journal: AMR, Southwest sign on for renewable fuel: American Airlines Inc. and Southwest Airlines Co. are two of eight airlines that have agreed to use Rentech Inc.’s renewable synthetic diesel fuel to run the airlines’ ground service equipment operations at Los Angeles International Airport. Read more

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Travel InsideOut is a Dennis Schaal Blog daily feature. Get a thorough-going look at the day's travel industry top and tangentially interesting stories. Feel free to comment on them below.

Monday, August 17, 2009

It’s all in the family at Travelzoo. CEO Holger Bartel announced that the deal-publisher and metasearch company will sell the assets of its money-losing Asia-Pacific division to Ralph Bartel, who controls Travelzoo. So it may be that Ralph and the board decided to sell the division to Ralph, which buffs up Travelzoo stock and takes this money drain off the books of the public company.

e-tid.com: Travelzoo plans Asia Pacific sale:Deals publisher Travelzoo is to sell its Asia Pacific division to focus on its European, North American and Fly.com operations.

For the twelve months ended 30 June 2009, the Asia Pacific division reported revenues of approximately $1.5m and an operating loss of about $7.8m. Read more

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I think I know why Oyster.com, the website featuring journalists’ hotel reviews, began requiring travelers to post reviews through Facebook Connect while TripAdvisor abstains from such a policy. See if you agree?

Dennis Schaal Blog: Why Facebook Connect Fits Oyster.com Strategy: TripAdvisor lives and dies by its traveler-written hotel reviews and the advertising money it takes in from the ads positioned "around the rails" of those reviews, while Oyster.com's business is based on journalist-written hotel reviews. Read more

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Social justice it ain’t. The better term might be social-networking injustice. That’s what happened apparently when a thief stole a laptop and then boasted about the heist on the victim’s Facebook account. No big travel angle here for me, but lots of travel afficianados are interested in Facebook, Twitter and the gang.

Mashable: Thief Brags About Stealing Laptop on Victim’s Facebook Account: Talk about adding insult to injury: a burglar who has stolen a laptop and other properties from a woman’s house has later logged into the victim’s Facebook account and bragged about the deed, complaining that the TV in the victim’s house wasn’t good enough to steal. Read more

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Apparently a passenger bill of rights law is not a slam dunk for the travel industry so industry groups and pundits will gather in Washington, D.C., Sept. 22 to discuss the issue. Maybe they should meet on a tarmac at Reagan National Airport instead to ensure a proper environment for the discussions? Just sayin'.

Eventbrite: Examining a Market Failure?: On Tuesday, September 22, 2009 consumer groups and travel industry organizations will conduct a Stakeholder Hearing in the Hart Senate Office Building regarding airline passenger rights. The purpose of the hearing is to examine passenger safety-related problems such as extended ground delays. Desired outcomes from the hearing include a better understanding of passenger safety problems; best practices from the EU in the area of passenger rights regulations; and the potential efficacy of proposed Congressional solutions. Experts representing all sides in this debate have been invited to participate in this hearing. Read more

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Stock picker Jack Hough steps away from the pack enamored with online travel stocks, and places Priceline.com among three popular stocks that he believes will disappoint.

SmartMoney: 3 Popular Stocks Priced to Underperform: I like Priceline.com, but no more than I like Expedia (EXPE: 22.12, -0.65, -2.85%), Orbitz 3 Popular Stocks Priced to Underperform (OWW: 4.74, +0.08, +1.71%), Hotwire and the rest.Read more

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CruiseOne, the cruise agency franchisor, is taking steps to make it easier to attract new franchise owners. It sounds like a nice installment on future agency relationships.

Under the program, new "Level One Franchise Owners" would pay $2,500 toward their initial franchising fee rather than pay the full fee of $9,800 up front, and CruiseOne finances the remaining cost of the franchise. The new franchise owner then pays in 24 monthly installments. Read more

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It looks like the woes of the hotel industry, plus the unattractiveness -- to say the least -- of mortgage-backed securities are a foundation for less development of new hotel projects.

Reuters.com:Data shows US hotel projects fell further in July: NEW YORK, Aug 14 (Reuters) - The number of U.S. hotel projects in development fell 26 percent in July, another illustration of how the financial woes of the industry have curbed growth, Smith Travel Research data showed this week. Read more

Travel InsideOut is a Dennis Schaal Blog daily feature. Get a thorough-going look at the day's travel industry top and tangentially interesting stories. Feel free to comment on them below.

I have some additional thoughts about what I see as the positive step that Oyster.com took when it began requiring that its consumer reviews be penned through Facebook Connect.

It's great that Oyster.com's user-generated content won't be created anonymously and this adds to review credibility.

However, using Facebook Connect is a limited solution because so many potential review writers don't use Facebook or even other social-media websites.

From a business perspective, that's OK for Oyster.com while it wouldn't work necessarily for businesses like TripAdvisor.

That's because TripAdvisor lives and dies by its traveler-written hotel reviews and the advertising money it takes in from the ads positioned "around the rails" of those reviews, while Oyster.com's business is based on journalist-written hotel reviews.

Unlike websites like Professional Travel Guide, which sees professional reviews as the end-all and be-all, Oyster.com is smart enough to know that it has to dabble in consumer-written hotel reviews and social media.

But, if Oyster.com doesn't attract a fraction of the user-generated content that TripAdvisor does when Oyster.com mandates vetting through Facebook Connect, then Oyster.com will have to live with that.

Oyster.com's differentiation in hotel reviews is through its journalist-written reviews.

And, that differentiation has a lot to do with the, well, differences between Oyster.com's and TripAdvisor's hotel review policies.

That is not to excuse TripAdvisor from its obligation to do more to ensure the credibility of its own reviews.

But, from a business standpoint, this may explain some of the differences between the two approaches.

Saturday, August 15, 2009

With all the controversy about fake hotel reviews, Oyster Hotel Reviews, the new website featuring professional reviews by journalists, began requiring consumers to use Facebook Connect if they want to rant or rave about a hotel.

"To ensure all user comments are consistent with Oyster’s standard of providing high-quality, authentic information, we require all commenters to log in through Facebook Connect to submit feedback," the company wrote. "The way we see it, if you’re willing to attach your identity to your commentary, you’re willing to stand behind what you say."

"We’re building a community of sincere and credible hotel evaluations drawn from the experiences of our own hotel experts and from you," Oyster added. "No anonymous mudslinging; no PR propaganda."

Oyster's policy is a great step in the right direction in trying to ensure the credibility of reviews.

Is it a panacea?

No.

Can hotels or others still game the system?

Yes.

Does requiring travelers to use Facebook Connect serve as a bit of a deterrent to casual review-writers who might otherwise trash a hotel for no good reason behind the veil of anonymity?

Sure, it does.

But, this is not tamper-proof.

Consumers, or hotel employees, can easily sign up for fake or misleading Facebook accounts: They merely need to provide name, e-mail address, password, sex and birthday.

And, consumers posting reviews on Oyster.com need not have stayed at the property they are reviewing as is required on Priceline.com and some other websites.

Priceline, for example, only solicits reviews from customers after they've completed their stay at the property, and I respect this policy.

But Priceline customers still post reviews semi-anonymously.

With Priceline's user reviews, you have to take the word of "John" or "Sara," with no link to a profile or clue about who these people really are unless they decide to provide some detail in the review.

Oyster's stipulation that consumers writing reviews do so through their Facebook accounts does provide a level of credibility, and that's great.

So when Kim-Marie Evanswrites on Oyster.com that the W New York Times Square doesn't "seem to deep clean the rooms, given that it's somewhat of a party hotel, I wish it were more thoroughly cleaned," we sort of know where she is coming from.

And, kudos to Oyster for going this route because consider all of the SEO (search engine optimization) benefits and stickiness attributes, which advertisers love, that Oyster is sacrificing.

Granted that Oyster has just launched consumer hotel reviews through Facebook Connect, but Evans' review of the W New York Times Square is the only user review about the property that Oyster has posted.

In contrast, the thousands of reviews that TripAdvisor can attract are a major factor in its not reforming its review-writing requirements despite all of the guff.

TripAdvisor, with its freewheeling-review policies (no proof of stay required and the ability to write anonymous critiques) has 443 reviews of the W New York Times Square.

The SEO lords at Google, Yahoo and Microsoft love this wealth of content, as do TripAdvisor's advertisers, because it adds to the user experience and attracts consumers who are deep into the trip-planning process.

TripAdvisor, too, can take this review bonanza and slice it and dice it for use on the websites of its subsidiaries like Family Vacation Critic. TripAdvisor gets more SEO love for doing so.

Oyster, of course, is not the first to use Facebook Connect as an entryway into user-generated content.

TechCrunch, for example, uses Facebook Connect as one of its several alternatives for leaving a comment on its website.

"Enter your personal information to the left, or sign in with your Facebook account by clicking the [Facebook Connect] button below," TechCrunch states.

So, in sum, congratulations to Oyster for using its pearly whites and putting some teeth into its new consumer-review policy.

The policy isn't a 100 percent solution (few are), but the hotel-review writing issue is evolving and steps like Oyster's will help.

Friday, August 14, 2009

Talk about blaming the victim .... The Stamford Hotel Marriott, according to published reports, alleged that a woman raped in her minivan in front of her children as she was leaving the hotel "failed to exercise due care for her own safety and the safety of her children and proper use of her senses and facilities." Well, there’s nothing like standing up for your guests, who always are the top priority, right?

Connecticut Post: Stamford Marriott claims woman was negligent in her own rape: STAMFORD -- A downtown hotel being sued by a woman raped at gunpoint in its parking garage is claiming she was careless, negligent and "failed to exercise due care for her own safety and the safety of her children and proper use of her senses and facilities," according to court documents. Read more

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With pilots' unions at Southwest Airlines and Frontier Airlines squabbling over the seniority issues inherent in a merged airline, Republic Airways swooped in and stole the Frontier prize from Southwest. Republic, which had been a regional airline, now spreads its wings and becomes larger than AirTran Airways. Unbowed, Southwest said it remains committed to service in Denver, Frontier’s base.

Travel Weekly: Republic takes Frontier after pilot impasse kills SWA deal: The inability of Southwest and Frontier pilots to work out seniority differences killed Southwest's $170 million bid to buy the Denver-based airline and lead it out of bankruptcy. Instead, Republic Airways Holdings won the right to buy Frontier for $108.8 million at Thursday's bankruptcy auction. Read more

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Priceline.com, Hotwire and getaroom.com offer divergent value propositions for different sorts of online -- and in one case -– over-the-phone bookers. And, as the competition for discount-hungry consumers picks up, one of the entrants is becoming more vocal about its advantages.

Examiner.com: Hotel discount ups and downs at Priceline, Hotwire and getaroom.com: With travel discounting in peak season, there are tons of ways to find hotel discounts, from deals newsletters to Web specials and last-minute offerings.

And three travel-discounting businesses -- two established players and one newbie -- offer varying booking modes that probably fit the temperaments of a lot of travelers. Read more

And, for more of a travel industry angle on the emergence of getaroom.com, put down the phone and read on.

Dennis Schaal Blog: Nothing Opaque About Priceline's Take on getaroom.com:So what are Priceline.com's and Hotwire's opinions about getaroom.com and its model?

I was unsuccessful in reaching Hotwire Group President Clem Bason yesterday about getaroom.com, the start-up launched by the founders of hotels.com, because Bason was said to be -- of all things -- traveling. I would still love to hear from Hotwire on this issue. Read more

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Calling all cars, calling all cars… High prices and rental-car firms not being very fleet of foot in meeting larger-than expected demand in various European countries have led to consumers walking up to rental-car counters and finding out that all available cars have taken to the highways without them. Car rental firms get no mileage out of these sorts of supply and demand foibles. Incidentally, in Euro-speak, when they talk about car-hire firms, they mean car-rental companies:)

BBC: Tourists face car hire shortage: Holidaymakers across the UK and Europe are facing bigger bills for hire cars - or risk not getting one at all - due to a shortage of vehicles. Read more

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It appears that new FTC chairman Jon Leibowitz wants to crack down on companies pushing behavioral advertising -- the practice of serving ads to consumers across a variety of advertising networks and websites based on the Web pages they visited elsewhere. Leibowitz is floating the idea of requiring companies to give consumers the choice of opting-in before becoming subjected to these services rather than only the current opt-out practice. In the travel industry, Expedia has been a leader in behavioral advertising as it sells consumers' cookie data to third-party advertisers.

Seeking Alpha: Government Could Make Monetization Harder for Online Ad Networks, Publishers: In the last few years, behavioral targeting has gone from being an interesting experiment to the core success of many ad networks. Many networks are using data collected from one site to improve the targeting of advertising on other sites. But in the past two months, both the FTC and some members of the House have discussed limiting the ability for online advertisers to do behavioral targeting. Read more

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Dylan Hotel in Dublin produced a video to show off the property. This kind of, well, show-biz will become much more popular among hotels in the future. Popcorn anyone?

Hotel Website Marketing: Dylan Hotel launch cool website video: Congratulations to the Dylan Hotel in Dublin for taking the plunge and adding a cool hotel video to their website. More Irish hotels need to embrace online video not only to improve their own website but also to get coverage on Youtube, Vimeo etc. Read more

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Travel InsideOut is a Dennis Schaal Blog daily feature. Get a thorough-going look at the day's travel industry top and tangentially interesting stories. Feel free to comment on them below.

Thursday, August 13, 2009

Super-sleuth Tom Botts noticed that the under-the-radar Travelzoo launch of fly.com in the U.K. is under way. You can take a look at the U.K. incarnation here, and notice that the domain name is not Fly.co.uk, which is owned by another travel comparison-shopping company. Oh the confusion.

Hudson Crossing Travel Industry Insight: Fly.com: A New Way for the UK to Search for Aeroplane Trips: TravelZoo property Fly.com has quietly launched a UK version of their meta search site. For curious US users, simply click on the flag in the upper right hand corner. UK users are redirected automatically. Read more

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Priceline.com notes that major hotel chains, to a great extent, have gone missing on competitor getaroom.com and the Name-Your-Own Price folks can name some reasons why.

Dennis Schaal Blog: Nothing Opaque About Priceline's Take on getaroom.com: So what are Priceline.com's and Hotwire's opinions about getaroom.com and its model? Read more

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The Arison family, which will retain a substantial piece, about 28 percent, of Carnival Corp.’s voting rights, will sell millions of shares of the company. You can call it a repositioning sail (actually, sale). The family has made this sort of move before.

USA Today Cruise Log: Arison family to sell some Carnival Corp. shares: Members of the Arison family, which owns a substantial chunk of Carnival Corp., plan to sell up to 8.5 million shares, the company said. Tax planning, estate planning and diversification purposes are the reasons given. Read more

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The off-again, on-again merger of the two leading corporate travel organizations in the U.S., NBTA and ACTE, may be off again as due diligence and name games appear to be getting in the way.

Travel Weekly: NBTA-ACTE merger talks apparently on again: Merger talks between the Association of Corporate Travel Executives and the National Business Travel Association are at the point of resuming, judging by a blog entry posted on Thursday by Kevin Maguire, NBTA president. Read more

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Arthur Frommer goes to the calculator and figures that JetBlue’s new All-You-Can-Jet Pass for $599 may just not add up to a bargain for some travelers.

Arthur Frommer Online: JetBlue's Seemingly-Cheap $599 One-Month Pass Is Perhaps Less Than First Meets the Eye: Though it's been greeted with rapture by some travel websites, I'm not entirely enthused about JetBlue's recently-announced All-You-Can-Jet Pass for $599. That device gives you the right to make unlimited flights on JetBlue, for one month between September 8 and October 8, for all of $599. And quite clearly, if there were a reason for you to make daily flights on JetBlue for 30 consecutive days, you'd save big by first buying the Pass. But that would involve an abnormal amount of flying. Read more

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Barry Sternlicht, who departed as chairman of Starwood Hotels in 2005, still has his hand in a few hotel -- or should I say, real estate -- ventures. His Starwood Property Trust just made its mark as the largest IPO to date of 2009. Location, location, location.

Canadian Business Online: Starwood Property Trust shares decline on 1st day of trading, IPO prices at $20 per share:NEW YORK - Shares of hotel magnate Barry Sternlicht's Starwood Property Trust Inc. initially declined on their first day of trading Wednesday before closing unchanged, even as the broader markets edged up after the Federal Reserve left a key interest rate at a record low. Read more

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Travel InsideOut is a Dennis Schaal Blog daily feature. Get a thorough-going look at the day's travel industry top and tangentially interesting stories. Feel free to comment on them below.

I was unsuccessful in reaching Hotwire Group President Clem Bason yesterday about getaroom.com, the start-up launched by the founders of hotels.com, because Bason was said to be -- of all things -- traveling. I would still love to hear from Hotwire on this issue.

But, I asked Priceline spokesman Brian Ek how he sees the hotel landscape and whether consumers would be better served to use getaroom.com over Priceline.

"Regarding your questions, it’s just about impossible to draw any comparisons since we’re hearing that our major hotel chain supplier/partners aren’t supporting it [getaroom.com]," Ek said. "They see it as non-opaque and dilutive to their ADRs (average daily rates)."

"From a hotel’s perspective, if a customer can get a discount at the exact hotel they’re looking at, why would they ever pay full price?" Ek mused. "It just hurts the hotel’s ADR at a time when hotels are doing their best to keep ADRs up."

Indeed, there apparently are a paucity of major chains using getaroom.com, which displays published and discounted rates on its website and asks consumers to phone its call center for additional unpublished bargains.

I checked getaroom.com today for Boston hotels Aug. 14-16 and found merely a dozen hotels displayed -- and just three local properties, a Radisson, a Millennium and a Wyndham, that are part of larger brands.

On Ek's point about ADR dilution, the Wyndham Boston Chelsea displayed a $200 base rate per night with a line through it and showed that room was now being offered for $160 per night.

That may be great for the consumer, but for the hotel's brand -- not so much.

Indeed, the Wyndham Boston Chelsea was transparently offering a discounted rate. Over at Orbitz.com, that same room was being offered for a base rate of $176.25.

I searched getaroom.com for Chicago hotels on the same nights and found an underwhelming 15 hotels on display there.

Interestingly, getaroom.com may have changed its mode of prompting consumers to phone its call centers for discounts.

While in the past getaroom.com displayed a message to "call for special unpublished rates" within the displays of some individual properties, now I see it is showing that message at the top of pages without pointing to specific hotels for cut-rate discounts.

That change may be a way to reduce the dilutive effect of a property's discounting -- or at least a bow to hotels' sensitivities on that front.

I had another thought about the apparent lack of chains' participation in getaroom.com.

In addition to concerns about discounting and lack of opacity, do getaroom.com owners Bob Diener and David Litman, who also co-founded hotels.com, have to battle still-raw resentment about hotels.com's distribution clout back in the day?

Methinks that may be a smoldering issue.

Meanwhile, Priceline, with its scale and flexibility, may have it all over getaroom.com and some other players in terms of the depths of discounts that it can offer travelers.

Comparing getaroom.com to Priceline, however, is apples to grapefruits. Priceline is established and getaroom.com is a newbie.

Also, although Priceline's opaque deals may be of better value overall for consumers, getaroom.com has value too because consumers know the identity of the hotel they are booking before they provide their credit card numbers.

And, that latter tack will appeal to plenty of consumers.

Still, Priceline President and CEO Jeffery Boyd wasn't talking about getaroom.com specifically, but he addressed the discounting issue during the company's second quarter conference call Aug. 10.

"We make business decisions as to whether to commit resources to matching those promotions and I think here domestically, our Name-Your-Own Price savings still are dramatically more favorable to the customer than one-night free if you buy four nights," Boyd said, referring to prevailing discounting trends.

Boyd added: "So we feel like we are very strongly positioned, even with that kind of promotional activity here, although there’s nothing to say that in future, we wouldn’t be able to offer that kind of a thing here in the United States and there’s nothing in the booking.com model or the Agoda model [two Priceline subsidiaries in Europe and Asia, respectively] that prevents them from offering that kind of lower pricing for multi-night stays, which is really what the principal promotional activity has been here in the United States and in Europe."

To paraphrase what Boyd seems to be saying to competitors and their discounting: "Bring it on."

Wednesday, August 12, 2009

Some travelers may take a pass on this, but undoubtedly JetBlue’s phone lines are humming because it began selling a flight pass for $599. Purchasers get a month of no-holds-barred travel, to some extent. Let's see how this gets displayed in global distribution systems.

Los Angeles Times: A month of JetBlue flights for $599 with ‘All You Can Jet’: JetBlue Airways today began selling a $599 pass that allows unlimited travel on the budget carrier from Sept. 8 to Oct. 8. The pass, called “All You Can Jet,” which has set Twitter buzzing, could be a good deal if you plan to fly a lot that month. But not if you don’t, because it’s nonrefundable. And there are other catches too. Read more

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First, the travel industry’s best and brightest commented on this blog about the innovation failures of the online travel companies. Then, Forrester Research releases a report by Henry Harteveldt, outlining consumers’ frustrations with booking travel online. And, now iPerceptions published the results of its own inquiry, showing that potential hotel bookers are put off by the lack of usability of hotel websites. I think we are onto something:)

Hotel Interactive: Hotel Websites Failing to Meet Expectations: The hotel industry is potentially losing out of millions of dollars in reservations because too many people are not looking and then booking. No, this is not a case of people using these sites for research only. Turns out technology is the main culprit here and its shooing away potential travel buyers in droves. Read more

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If timing is everything in life, then Continental Airlines didn’t have much luck when it announced the beginning of a helicopter-service promotion for business traveler a day before last Saturday’s accident involving a private plane and a tour helicopter.

Examiner.com: Continental announces helicopter promotion 1 day before tour crash: Continental Airlines announced a Newark Airport-Manhattan helicopter promotion with US Helicopter one day before the Saturday crash of a Liberty Helicopter Sightseeing Tours helicopter over the Hudson River. Read more

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It’s an exciting day at Yale [hint: that’s secret Yahoo code for, well, Yahoo] as the company tries to reestablish Yale [you know, Yahoo] “mindshare” in light of the Yahoo-Microsoft advertising deal. To all of you travel advertisers out there -- get ready for some stick-to-the script talking points from Yahoo sales/spinmeisters when the partnership gets its wings a year or so from now.

Silicon Alley Insider/Yahoo: Yahoo CMO Talks Up Microsoft Deal In Internal Memo: Yahoo CMO Elisa Steele sent out a memo to her reports following the news two weeks ago that the company had finally outsourced its search to Microsoft. Kara Swisher landed a copy today. Read more

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Here’s a compilation of properties and chains on Twitter. It’s a relatively small list, considering the expanse of global hotels, but the ranks undoubtedly will increase.

Resideo Hotels: Hotels Using Twitter: More and more hotels are signing up on Twitter, so we decided to put together this list. It's most definitely, by the nature of the web, incomplete -- so please feel free to let us know (via email, Twitter or the comments section below) if you know of others that should be included. Enjoy -- and feel free to follow us on Twitter: @resideo Read more

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Oh, love – or is it lust – is in the air with the consummation of a partnership between Hedonism II and a swingers’ website. We hope it’s not all just a tease, but travel agents, in this deal, won’t have to split their commission with the website.

Travel Weekly: Hedonism II partners with swingers' website: A swingers’ website and SuperClubs’ Hedonism II resort in Jamaica have teamed up, and the partnership could prove a profitable connection for travel agents. Read more

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Travel InsideOut is a Dennis Schaal Blog daily feature. Get a thorough-going look at the day's travel industry top and tangentially interesting stories. Feel free to comment on them below.

Tuesday, August 11, 2009

PhoCusWright analyst Norm Rose takes on Forrester’s Henry Harteveldt and notions that online travel agencies are not performing well. It's great to see some dialogue among competitors.

Travel Technology: Innovation in Online Travel: The general media is a buzz with stories about the lack of innovation of the major OTAs. A recent Forrester Report which shows consumers' frustration with online travel planning and booking is cited. The report stated that many consumers are fed up with the complicated process of planning and booking travel online. Part of this frustration concerns added fees, what we like to label in the travel industry as ancillary revenue. The article points to a resurgence of bookings through traditional travel agents. Read more

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What will Air Canada’s decision to drop its ITA Software-built reservations system project mean to ITA and its customers? And, what’s up with Air Canada making new approaches to the travel agency channel?

Dennis Schaal Blog: ITA Software's Lollipop: ITA Software, the king of online air search and pricing, undoubtedly took a big hit when Air Canada cancelled the bulk of the reservations system that ITA had been working on for four years. Read more

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Perhaps Continental Connection Flight 2816 and its stranding of 48 passengers for hour upon hour at Minneapolis-St. Paul airport last Friday will get a Passenger Bill of Rights bill moving without delay.

PeterGreenberg.com: Express Jet Tarmac Nightmare Prompts Renewed Calls for Passenger Bill of Rights: Passenger rights advocates are renewing their push for legislation to protect fliers from excessive airport delays, after an incident last Friday in which 48 people were stranded on a plane for more than five hours. Read more

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Travel Weekly packages a sector-by-sector analysis of what the Winter might yield.

Travel Weekly: Disappointing summer could make for a very long winter: This is the time of year when many travel companies, particularly airlines, generate their peak revenue. They make hay.

More bullishness here about Priceline as the online travel company, with its Name Your Own Price business in the U.S. and Booking.com in Europe, beat analysts’ expectations for the 13th consecutive quarter.

ITA Software, the king of online air search and pricing, undoubtedly took a big hit when Air Canada cancelled the bulk of the reservations system that ITA had been working on for four years.

Remember that at the height of the pitched debate in 2006 involving ITA, G2 SwitchWorks, Farelogix, Sabre, Amadeus, Galileo and Worldspan about alternative distribution systems and full content in GDSs, ITA abandoned the distribution game, in favor of developing a host system for Air Canada.

Now, to a large extent, that Air Canada project is off the table.

One of ITA's QPX customers told me that the loss of the Air Canada project must feel like "a kick in the shorts" to ITA, and a second customer chimed in: "Anyone who says that the Air Canada thing isn't a HUGE, big-fat deal to ITA is not being truthful."

Meanwhile, one of ITA's investors remarked that ITA has "a healthy balance sheet" and the loss of the Air Canada business "is not tremendously material."

Indeed, ITA's metasearch, online agency and wholesaler customers shouldn't have any fears about the viability of the ITA business.

The ITA investor with whom I spoke said although there is "disappointment" about losing the Air Canada business, the four-year process enabled ITA to develop a "big lollipop," namely a "brand-spanking new" airline reservations system solution which it can take to interested airlines.

The investor characterized the new reservations system, which is said to be in the testing phase, as an "elegant, open-systems solution for the airline industry."

I sort of doubt, though, that many airlines are in the market for new lollipops at the moment.

I don't see many going on a candy-buying spree in the short term.

After all, having an airline wean itself off a legacy system and transitioning to a new res system is a massive project of the highest complexity.

However, recessions do come to an end at some point, so all hope is not lost.

That deadline passed quietly and there's been no sign of any migration in the offing.

I wouldn't be surprised if United pulled an Air Canada, but we'll see.

This airline hosting stuff is a tough business.

And, here is the perspective of someone who knows about some of the challenges.

"I think building reservations systems from scratch are extremely difficult tasks for any company to take on," said the source, who doesn't work for ITA. "If anyone can do it, it is ITA. Virgin America bought what was, at the time, Travelport’s new reservations system, aiRES. It is still a very promising system, but it has taken YEARS to get it where it is, and it is still WELL short of promises made when it was bought."

The source sees a silver lining -- which seems a bit Pollyannish -- for ITA in Air Canada's withdrawal.

"It is interesting that ITA will continue to build out the system for other potential customers. Building a reservations system for a unique carrier like Air Canada (with its unique pricing) is actually not a good starting point, since so much of what they would have built for AC would have been customized and not easily transitioned to a more traditional carrier. So in some ways it may free ITA to build its 'core' system that is attractive to more airlines."

An interesting side note about Air Canada is that it is making some distribution news in re-engaging with travel agents through its travel agency portal and API, which it calls AC2U.

Remember that one of the distribution issues with Air Canada in the last few yeas was that the GDSs couldn't display the airline's branded fares in the way the airline sought.

Using the API, Air Canada has hooked up with:

• Agencia by Travelport;

• VTOLite+ and Hawkeye by Farelogix;

• ConvergentPro by Convergentware;

• Cliqbook by Concur Technologies;

• KDS Portal and KDS Corporate by KDS; and

• ResX by TRX

And, although Air Canada has reached out to Canadian agencies with commissions and hooked up to the above distributors and corporate-self booking tools via AC2U, there aren't any new developments with Sabre, which had a big falling out with the airline.

Airline spokesman John Reber said: "There are no specific developments with Sabre at this time. However, we continue to dialogue with them regarding potential solutions."

Orbitz Worldwide is about to change its hotel business model and go-to branding in Asia-Pacific.

It's an evolution of OWW's global, multi-brand strategy, where its core hotel business model varies from region to region.

In North America, where full-service online travel companies Orbitz.com and CheapTickets.com prevail and vacation packages are vital, and in Europe on ebookers' turf, OWW sees the merchant model remaining its dominant practice.

But, in parts of Asia-Pacific, Orbitz will tweak the RatesTogo.com modified retail model by expanding the booking window from 28 to 365 days, and in many markets OWW will designate HotelClub as the lead brand.

RatesToGo is a unit of OWW's HotelClub, a hotel-only site that is strong in Asia-Pacific and Europe. Today, HotelClub uses the merchant model for gateway and other major destination cities, and RatesToGo uses the modified retail model, where consumers prepay the RatesToGo commission and booking fee in the form of a deposit and pay the balance to the hotel upon checkout.

The commission generally is 10 percent to 15 percent.

Mike Nelson, president of the Orbitz Worldwide Partner Services Group, said the strategy soon will change so that HotelClub will be the lead brand in emerging markets and in "secondary cities" in Asia-Pacific, and HotelClub will offer both the merchant and modified retail model with the longer 365-day booking window.

However, the strategy will vary market to market, Nelson said, with RatesToGo and HotelClub coexisting in the current status quo in Australia, for instance, where RatesToGo is strong.

OWW's initial focus for expanding the modified retail model from last-minute inventory to bookings 365 days' out, and pairing it with merchant model rooms on HotelClub is in Asia-Pacific, Nelson said, but he doesn't rule out a broader rollout.

Asia-Pacific is fertile ground for the modified retail model because, among other advantages, it eliminates the need for the hotel to set up a commission-payment system, Nelson said.

And, that makes it easier for HotelClub to sign new hotel partners, especially among smaller or independent hotels.

And, in focusing on a niche of emerging markets and secondary cities, OWW may be able to avoid head-to-head competition with some of the region's strongest hotel players like Ctrip in China and Rakuten in Japan.

At least, that's the hope.

Oh, by the way, HotelClub's new modified retail model will have it's own catchy branding.

WiFi service is becoming a key differentiator on high so most carriers are looking to get on board with the service, although they are taking varied approaches when it comes to pricing.

Travel Weekly: Airlines rush to add WiFi: The long wait to use WiFi on domestic flights is quickly coming to an end. In response to demands from increasingly connected leisure and business travelers for Internet access aloft, every major U.S. carrier is in the process of outfitting aircraft with WiFi or at least is testing the service. Read more

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WorldMate Gold and Where for iPhone were among the travel-specific applications which made PC World's list of the Top 10 iPhone apps for summer travel. Meanwhile, an Advertising Age story wonders whether developers across all industries should start broadening their mobile horizons.

PC World: Top 10 Must-Have iPhone Apps for Summer Travel: Summer vacation isn't just about escaping the office or beating the heat. It's about getting maximum enjoyment from your surroundings--and your trusty, hard-working iPhone can help. The iPhone apps we've collected here will enhance any summer getaway--and help you realize the full potential of your mobile device. Read more

Advertising Age: How Wedded Are Marketers to the iPhone?: SAN FRANCISCO (AdAge.com) -- First TechCrunch's Michael Arrington quit the iPhone, now the FCC is targeting Apple's App Store. With all the negative press, should marketers question their own love affair with the device and its app platform? Read more

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The iconoclastic getaroom.com launched a $10 million home-grown advertising blitz to drum its name into the rhythm of consumer consciousness. Meanwhile, getaroom.com appears sort of back-to-the future-ish with its telephone bookings, but the business is all over nouveau channels i.e. YouTube, Twitter and FaceBook.

Dennis School Blog: getaroom, getaroom, getaroom.com: getaroom.com, the hotel-booking site and call center business introduced by hotels.com founders David Litman and Bob Diner, just fired off $10 million worth of TV, radio and print ads in key markets across the country. Read more

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When pesky travel promotions get gamed or backfire, as Expedia apparently found out, travel companies must be flexible and transparent.

Elliott Blog: Never mind! Expedia quietly voids — then unloads — terms on refer-a-friend promo: Promises were meant to be broken. And if you’re Expedia, unbroken.

At issue is a promotion that offered a £20 hotel coupon code for each referral. When the terms were changed and the codes were suddenly disabled at the end of July, it set off an email campaign to Expedia and to members of the travel media who specialize in solving travel disputes. Read more

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Traffic Jam

The following posts of recent -- and not-so-recent -- vintage continue to popular picks, and may be worth a second look:

Saturday, August 8, 2009

getaroom.com, the hotel-booking site and call center business introduced by hotels.com founders David Litman and Bob Diener, just fired off $10 million worth of TV, radio and print ads in key markets across the country.

You can view one of the 30-second spots, unveiling the getaroom.com theme song to the tune of the William Tell Overture, on youtube.

"Name recognition is key to generating awareness and driving consumers to the getaroom.com website and call center," said Diener, in the press release announcing the ads. "These ads cut through the clutter and once you see and hear them our name certainly stays top of mind."

Litman and Diener delivered the advertising the old-fashioned way: They wrote, directed and paid for the ads themselves.

These guys know what they are doing. I have visions of them pacing the Dallas call center at this moment, correcting the miscues of call center agents and grabbing the headsets themselves, taking customers' calls.

As you may recall, getaroom.com lists published rates on its website, but consumers can register and phone the call center for unpublished discounts, said to "typically" be 10 percent to 25 percent, but tapping out at 50 percent.

Not that there are a bunch of novices in the call center and filling out hotel sales teams.

When you register for getaroom.com, there are links at the bottom of the page to getaroom.com on Facebook and Twitter.

And, in another interesting twist, Travel Dividends believes that the commissions getaroom.com pays through its travel affiliate program are "rather rich," inferring that getaroom.com could make some headway against more modest programs offered by Expedia, Hotwire, Travelocity, Priceline and Orbitz.

Diener tells me that in addition to the company's first advertising campaign, "much more is coming."

getaroom.com just starting offering inventory from Barcelona hotels and plans on introducing other cities in Europe later in August, Diener says.

Launching a $10 million advertising campaign for a start-up is a pretty good start, especially when you realize that the duo made a few pennies from selling hotels.com and have deep pockets.

William Tell Overture or not, I think you will be hearing the name getaroom.com a lot in the future.

Friday, August 7, 2009

Southwest and JetBlue now are flying into some major airports instead of off-the-beaten-track landing strips. Will they be able to maintain their value proposition as they get right in the middle of all of the hub-bub?

Wall Street Journal: Southwest Lands at Logan, Bringing Low Fares Mainstream: Next week Southwest Airlines Co. will do something that Herbert Kelleher, its legendary former chief executive, said would never happen: The airline will offer flights at Boston’s Logan International Airport. Read more

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Following are two articles, one from the Los Angeles Times and the second from the Havana Times, detailing efforts by U.S. citizens to defy the Cuba travel ban. Hey, it's Travel InsideOut, you know.

Los Angeles Times: Violator of Cuba travel ban seeks to force court action: Erika Crenshaw returned to Los Angeles this week from a 10-day trip to Cuba with a message for authorities charged with enforcing a ban on travel to the communist-ruled island: Come and get me. Read more

Havana Times: US Travel Ban on Cuba Losing Teeth: While visiting Cuba is still illegal and subject to fines for US citizens, Washington’s travel ban appears to be losing some of its teeth. Read more

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A new tool for revenue managers helps hoteliers determine how to set their opaque rates on Priceline. How high is too high? How low is too low? Let’s limbo some more:)

The Center for Hospitality Research: Setting Room Rates on Priceline: How to Optimize Expected Hotel Revenue: Executive Summary: This report and tool combination develops a novel approach to set prices on Priceline.com to maximize revenues received from releasing rooms to Priceline. When setting rates on Priceline, hotel properties face a straightforward auction-like pricing decision. Read more

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A new hotel application on Twitter shows more experimentation with travel search and planning on the social media site.

InventorSpot:Twihotels, The Twitter Hotel-Finder Launches: Hotel booking sites like Hotels.com can locate a number of hotels anywhere in the world and if you are diligent enough to cross-reference with TripAdvisor you can most likely obtain a review on that hotel's performance. But until now, there was no one site that could surface hotel recommendations for you firsthand, without a lot of searching and cross-referencing. Twihotels is filling that void nicely with a new app they just rolled out in August. Read more

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It’s too soon to tell whether there will be fewer cruise-ship repositionings or vacation cancellations, but hurricane watchers have downgraded their hurricane forecast after a pacific start to the hurricane season.

Travel Weekly: Hurricane forecast altered after a quiet two months The lack of hurricane activity prompted the U.S. National Oceanic and Atmospheric Administration (NOAA) to alter its 2009 forecast on Thursday. Read more

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I’m betting that Orbitz will take Ratestogo.com’s modified retail model out of Asia and Europe and into North America in a meaningful way.

Thursday, August 6, 2009

Here’s a Google crystal-ball double bill, featuring my interview with Google’s Rob Torres, and separately Alex Bainbridge’s post about how keyword bidding on hotel names may evolve in the next few years.

Dennis Schaal Blog: Google: We Won't Be a Copycat in Travel: After writing "Kayak's Hafner Awaits Google Hotels" and the "Brave New World of Google Travel 3.0," I spoke with Google's managing director of travel, Rob Torres, and learned a lot more about what Google won't do in travel. Read more

Musings on travel ecommerce blog: Google travel is coming… could it be a hotel PPC system?: I have been reading this great blog post over on Dennis Schaal’s blog. Kayak Hafner awaits Google hotels Well worth a read (and interesting comments too). Kayak CEO Steve Hafner thinks “it’s only a question of time” before Google begins displaying hotel pricing, a move that could change the online-travel ecosystem. Read more

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Family strife reportedly is driving an IPO for Hyatt Hotels in the midst of the sort of down economic times that would make any family squabble. After the IPO, ownership wouldn't be all in the family, but they still would control the company.

Business Week: Though Hotels Are Slumping, Hyatt Preps for IPO: It has been a stock offering investment bankers have been drooling over for decades. Hyatt Hotels has a prominent brand name and a multibillion-dollar market value. On Aug. 5 the privately held company filed with federal regulators to begin the process of selling shares to the public. Read more

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Pundits are speculating that the Travel Promotion Act may take a back seat to the Cash for Clunkers goldrush as legislators seek to do wheelies to get out of town.

Dow Jones Newswires: Clunkers Vote Could Derail Tourism Bill Favored By Reid: WASHINGTON -(Dow Jones)- The push in the Senate to approve a $2 billion extension of the popular "Cash for Clunkers" program could prevent Senate Majority Leader Harry Reid, D-Nev., from bringing up a bill aimed at boosting the flow of foreign tourist dollars into the U.S.

The perceived urgency in extending the popular and economically stimulative clunkers scheme may leave no time in the crowded Senate schedule this week to turn to the Travel Promotion Act, according to several Senate aides. Read more

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It's going to be a long hard road to get the Yahoo-Bing agreement implemented and Yahoo has several out clauses if things don't go according to plan. Also, according to the agreement, Yahoo gets certain payments from Microsoft that weren't initially publicly disclosed.

Financial Times: Yahoo-Microsoft search deal has escape clauses: Yahoo’s recently announced search alliance with Microsoft has escape clauses that allow the top internet destination to pull the plug if the partnership stumbles, according to a regulatory filing late Tuesday. Read more

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From zero to hero -- suddenly online travel stocks have some legs.

Investopedia: Online Travel Stocks Taking Off: At the onset of the economic recession, online travel stocks were among the hardest hit last year. As recently as this spring, many of the companies in this space were trading at or near 52-week lows. Fast-forward a few months and these stocks look to be taking off on a trip to the top. Read more

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Travel InsideOut is a Dennis Schaal Blog daily feature. Get a thorough-going look at the day's travel industry top and tangentially interesting stories. Feel free to comment on them below.

Here are some headlines from my conversation with Rob Torres, who emphasized that all options -- including the build versus buy equation -- are on the table. Torres said:

• Google monitors all competitors, regardless of their market share, but "we are not going to copycat. We will only do something if we can do it 10 times better than what's happening today."

• "Microsoft made a great acquisition in Farecast," but Google likely would take another route. "We don't have anything like that," Torres said, referring to Bing Travel, "and we don't intend to do something like that."

• Asked whether Google would acquire a company like Kayak or FareCompare, Torres said: "Would we acquire a Kayak just to be a Kayak? Probably not."

• "If anyone can come up with a game-changing opportunity" in travel, it would be Google, he said.

• Torres doesn't see Google introducing metasearch as an aforementioned game-changing opportunity. "The reality is that Kayak and others already are doing that very well."

• Kayak CEO Steve Hafner was being "highly speculative" and started from erroneous assumptions when he said Google doesn't care about flights and would bolster its stance in the travel business in the hotel sector. "We don't look at it as one versus another [air versus hotel]," but view the travel vertical "wholistically," Torres said. "I think our flight partners are very important. That's where they [most trip-planning queries] start."

• Asked why then Google did not further develop it's one-box flight search , launched in late 2005, Torres said "it has taken time to figure out the next step."

• Torres said Google's recent introductions of City Tours and Favorite Places, two travel applications leveraging Google Maps, were "nothing really big" in terms of the big picture and "not necessarily driving a travel product."

• A widely held view, Torres stated that the possibility of Google introducing a "transactional model" like an online travel agency are remote.

• Rather than attacking things piecemeal, Torres said Google looks to improve search across specific verticals and industries, including travel. He said Google has tremendous relatively untapped assets, including Google Maps, Google Base and YouTube.

So, now we know some of the things that Google likely will not do in travel.

Harford said during the OWW Q2 conference call yesterday that he "loves" the ratestogo.com business model, which offers a twist on the traditional agency model.

Harford, who pledges to go gang-busters in building the Orbitz hotel business, said ratestogo.com's "modified retail model" is much simpler than the merchant model, which requires tons of nurturing and work.

And, besides, ratestogo.com immediately receives its pre-paid commissions, ranging from 10 percent to 15 percent, in the form of deposits as soon as consumers book the rooms.

Some 15,000 properties have signed up for the ratestogo.com approach, Harford said.

Here's how the ratestogo.com model works.

To book the Palms Hotel and Spa Miami, the consumer pays ratestogo.com up-front a $47.40 "deposit," including a $3 nonrefundable booking fee.

So, ratestogo.com collects its compensation immediately and doesn't have to wait weeks or months for finicky hotel chains and independent properties to send commissions.

And, from a consumer perspective -- and here's a HEADLINE -- the booking fee is transparent -- $3.

After the room is booked, ratestogo.com e-mails the customer a voucher, which states that consumer must pay the $251.60 balance, plus applicable city, state and other taxes, to the hotel upon checkout.

In this way, the hotel gets its money immediately upon the completion of the stay.

In turn, with online travel companies being tracked by tax-deprived cities, counties and states across the country, ratestogo.com bows out of the whole tax mess, and pays diminished credit card fees because it is merely processing the deposit and not the full retail rate for the room.

Tom Botts, a partner in Hudson Crossing, notes that collecting commissions from hotels can be "a horror show" so speedier payments are advantageous to the intermediaries.

However, a downside for the OTCs is that they wouldn't get to hang onto the hotels' money for as long as they do now under the current merchant model.

Harford said the ratestogo.com business faced challenges in the second quarter, largely because it does a lot of business in Europe, where the downturn is acute.

He offered some tantalizing hints about the future utility of the ratestogo.com model as he praised its advantages over the merchant model.

For example, Harford said it is easier to acquire hotel partners using the ratestogo.com model relative to the merchant model, which requires a protracted effort.

So, could the modified agency model be rolled out on a broader basis internationally and in the U.S?

I don't believe that Orbitz is about to chuck the merchant model -- although it has less at stake than Priceline and Expedia. For example, Harford said Orbitz estimates it only has about a $1 million annual tax exposure for its merchant model hotel business in New York City.

And, whether the ratestogo.com model would win broad consumer acceptance, given its complexity, is another issue, Botts pointed out.

Ratestogo.com currently offers "last-minute" inventory for bookings up to 28 days' out.

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About me

I've followed online travel, its twists, turns and detours, since the beginning (not Adam and Eve, but Rich and Terry), and will follow the aforesaid in this blog. I'm North America editor of Tnooz and I write USA Today's Digital Traveler column. Things not in my resume: I visited Orbitz headquarters pre-launch in 2000 and, left unattended, eavesdropped and examined the whiteboards to learn partnership details; Travelocity's ex-CEO Michelle Peluso credits me with her success (Wharton notwithstanding) after I wrote a sentence (with accompanying photo) mentioning that some of her Site59 women wore fishnet stockings and then airline execs kept the phone lines busy; I once drove to tiny Sherman, Conn., to see where PhoCusWright lives; and I was a nachtportier in a West Berlin hotel in the days (Btw) when a nasty wall split the city. Fyi, the previous stuff wasn't necessarily in chronological order.

My Diss-claimer

The opinions I express in the Dennis Schaal Blog are my own. Only I could think of this stuff. The opinions uttered or written here in no way reflect on the views of past employers, current partners, future associations (how could they anyway?) or my first-grade teacher, Mrs. Slayton. I don't have a lawyer, but if I had one, he or she probably would have told me to write something like this. Well, maybe not exactly. The Dennis Schaal Blog is Copyright (c) 2009 by Dennis Schaal. All rights reserved.